The ministry of food processing has set a target of 150 per cent growth in processed food exports in the next five years on rising global demand of Indian food. This will be 5 per cent of the total share in global processed food market.
Agriculture & Processed Food Products Export Development Authority (Apeda) monitored processed food products including fresh and processed fruits and vegetables, livestock products, cereals etc. have grown exponentially by 24 per cent in rupees term (Rs 39,461 crore) and 10 per cent in dollar term ($8.67 billion) in 2008-09.
The way value addition and food processing is picking up, India’s exports would increase by atleast another Rs 60,000 crore by 2014-2015.
But, to maintain the same growth pace, an investment of Rs 100,000 crore is required during the period which has received lukewarm response from investors especially in the projects such as Mega Food Park , said Ashok Sinha, secretary, Ministry of Food Processing Industries, in the sideline of Agricorp ‘09 in Mumbai.
Sinha emphasised the need of corporates’ entry into contract farming and fast adoption of mechanised farm practices which can help enhance foodgrain production and reduce reliance on imports. Since land holding by average farmers has declined significantly in the last four decades due to population explosion, there are rooms for better fertiliser, pesticides and seeds management through contract farming by corporates which is not easy but possible, Sinha said.
During this period, average land holding by farmers has declined to a third from an acre each in 1970. Equally difficult is the adoption of mechanised farm practices as only 10 per cent of Indian farmers own tractors for tilling the field while around 30 per cent are using this. According to a recent study by the Ministry of Agriculture, in a country where 60 per cent population depend upon agriculture, over 80 per cent farmers own less than five acres of land while over 63 per cent of farmers control less than 2.5 acres of landbank.
While contract farming has not been allowed by the government officially, private companies have been entering into contracts with farmers to grow the agricultural commodities of the former’s choice. In some cases, quality seeds, fertilisers, pesticides and irrigation equipment are availed by the company on a condition to supply the output to the company. Farmers enjoy premium over market price of the produce from the company.
“However, the law is silent on the issue whether to allow corporates’ into contract farming or not,” said Bipin Sinha, project director of UBM India, an organiser of events on food processing sector.
Bharat Doshi, president of the Bombay Chamber of Commerce and Industry, said, “Barring 2006-07 when agri sector growth surpassed the target of 4 per cent, the government has never achieved even half of that. Hence, there is an urgent need to raise domestic production of agricultural products to meet the rising demand.
At a time when land bank is shrinking, better utilisation of farm techniques including multiple cropping, mechanisation of tilling, sowing, harvesting and post-harvest management for reducing agri output loss, can enhance availability of farm produce to feed growing population. According to an estimate, India loses agri commodities worth Rs 33,000 crore due to poor post-harvest management practices.